UK: Pensions And Same Sex Relationships: The Marriage (Same Sex Couples) Act 2013 And EAT Decision In Innospec v Walker

Last Updated: 17 March 2014
Article by Mark Howard, Judith Donnelly and Paul Hodges

The majority of the provisions of the Marriage (Same Sex Couples) Act 2013 ('the Act') come into force on 13 March 2014, extending marriage to same sex couples.

For occupational pensions schemes, the effect of the Act and the Equality Act 2010 is to give surviving same-sex spouses similar occupational rights to civil partners:

  • Contracted-out survivors' benefits relating to service on or after 6 April 1988
  • All other survivors' benefits relating to service on or after 5 December 2005

However, the decision to treat same-sex spouses in the same way as civil partners has been controversial; so the government agreed to include a provision in the Act requiring a review of the differential treatment between opposite-sex survivor benefits and same-sex survivor benefits. The review is now underway and the Secretary of State is required to report by 1 July 2014. So although the Employment Appeal Tribunal has allowed the appeal in Innospec v Walker – and upheld the Equality Act provisions regarding surviving civil partners - we may still soon find that civil partners/same sex marriages are to be treated the same as opposite sex marriages for all pensionable service.

Occupational pension scheme rules existing before 13 March 2014

The effect of the Act is that marriage is extended to same sex couples. This includes the interpretation of existing legislation with references to "marriage" to be read as including a same sex marriage.

"Private legal instruments" - which will include a pension scheme's trust deed and rules - will not be affected if the instruments were entered into before the change of law. This means that references to "marriage" or "spouse" will be interpreted as meaning an opposite sex relationship only.

The Equality Act 2010 though imposes an overriding non-discrimination rule on occupational pension schemes. So trustees will have to treat survivors of same-sex marriages in the same way as a survivor of an opposite sex marriage, but only for pensionable service from 5 December 2005 (when the civil partnership legislation came into force), and to contracted-out rights accruing post 5 April 1988.

What do trustees and employers need to consider?

  • Although the non-discrimination rule is overriding, trustees should consider updating scheme documentation in due course. Trustees are given a power under the Act to amend rules by resolution, but cannot go further than the minimum requirements of the Act without employer agreement
  • Trustees and employers can also consider whether same sex marriages should be treated the same as opposite sex marriages – and calculate a survivor's pension on pensionable service before 5 December 2005 - regardless of the outcome of the Government's review of survivor benefits. This would require an amendment of scheme rules
  • Care must still be taken if re-stating the scheme documentation after 13 March 2014. The re-stated rules would be regarded as a new instrument which would mean terms such as "spouse", "widower" and "widow" would have a wider meaning encompassing same sex marriages than they would before. This could have the unintended consequence of treating same-sex marriages the same as opposite sex marriages for all pensionable service, not just pensionable service after 5 December 2005 or contracted-out service from 6 April 1988

Innospec Ltd and others v Walker UKEAT 0232/13/1802


Mr Walker received a pension from his former employer, Innospec Ltd. After entering into a civil partnership in 2006, he sought to clarify the amount of survivor's pension that his civil partner would be entitled to receive upon Mr Walker's death. The entirety of Mr Walker's pensionable service pre-dated 5 December 2005 and so his civil partner would only receive a small pension based on his contracted-out rights accrued post 5 April 1988. Mr Walker claimed that the pension scheme trustees had unlawfully discriminated against him both directly and indirectly, on the basis of his sexual orientation. The tribunal upheld his claim accepting that where same-sex couples were in a "comparable situation" to married couples, it was directly discriminate to treat them less favourably than opposite-sex married couples on the grounds of sexual orientation. The tribunal also held that the exception in the Equality Act 2010, providing benefits accrued pre 5 December 2005 only to opposite-sex married couples, contravened the Equal Treatment Framework Directive (the 'Directive') and so should be interpreted in such a way as to be compatible.


Innospec Ltd appealed this decision, and the EAT upheld this appeal on the following grounds:

  • The partial exception in the Equality Act 2010 was not incompatible with the Directive, as the Directive did not purport to have retrospective effect in relation to inequalities that arose on the basis of sexual orientation before the date it was due to be transposed into national law (2 December 2003)
  • The EAT agreed with the Employment Tribunal and found that Mr Walker had suffered direct and indirect discrimination. However, the consequence of its decision that the exception in the Equality Act 2010 was compatible with the Directive, meant that there was no unlawful discrimination
  • The EAT determined that the exception in the Equality Act 2010 was clear. The EAT held that it did not prevent pension schemes from equalising benefits fully between married spouses and civil partners, but it did not compel them to do so either. The EAT held that to interpret the paragraph otherwise would be to "take a step which impermissibly crosses the line between interpretation and legislation"
  • Lastly, the EAT was not willing to disapply the exception in the Equality Act 2010 as discrimination on the ground of sexual orientation in a manner so permitted by paragraph 18, fell outside the scope of EU law (at least until 3 December 2003, the date by which the Equal Treatment Directive had to be enacted)

Clyde & Co comment

The EAT's decision in Innospec and others v Walker restores the status quo. However as mentioned above, a review of the entire treatment of survivors' pensions and same sex and opposite sex relationships is underway. Interestingly, the Innsopec decision makes reference to the Government Actuaries Department estimating the additional cost of extending survivors' benefits to be between GBP 88 million and GBP 3 billion; although the basis of calculating this – and the wide range – was not explained. We will have to wait until the spring for more details, but perhaps such a significant cost will mean the Government will be reluctant to make more changes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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